The food delivery giant Deliveroo has today announced huge losses for 2016 of around £129m. Most companies would be gutted with such damning figures. Not deliveroo, they were quite optimistic saying how proud they were to be operating in so many countires (12) and with so many riders (30,000).
For anyone that isn't aware of what they do, they're basically a food delivery service. The niche is that they deliver restaurant food to your home, as oppose to the standard takeaway food. Being a student untill recently, I used deliveroo an awful lot. The app makes it very easy to find exactly what you want, how much it's going to cost and when it will be delivered (which is usually very quick).
So how can they keep operating with such huge losses?
They probably have some very wealthy and very trusting backers. The idea itself is excellent. It gets even more excellent when you can't be bothered to cook or leave the house, but you can get first rate food to your door. I think the issue with the money is most likely down to their rapid expansion. Considering they have only been active for 4 years and already have 30,000 staff, its surprising their losses are not higher. Take Uber for example, they are still operating at a massive loss however they are also household name and in over 80 countries.
In the coming years I have no doubt that Deliveroo will be a success. They're doing their business expansion sooner rather than later and with the constant rise in inflation it may be no bad thing. Of course it could go the other way and we never hear from them again after a couple of years. Then again, who am I to commentate on such matters.
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